The cooperative relationship between smallholders and rural brokers in contract farming: the evolutionary game model analysis

Abstract

This paper employs an evolutionary game model to analyze the cooperative relationship of contract farming between smallholders and rural brokers, which simulates the strategic options and analyses for the long-term stability in different situations. The result shows that there are two strategic statuses of the long-term stability on the relationship of smallholders and rural brokers, which both sides adopt the cooperative strategy or the non-cooperative strategy simultaneously. To enable both sides to adopt a stable cooperative strategy, their incomes must be greater than the cooperative costs, transaction costs and risk costs in contract farming. Otherwise, the stable strategy adopted by both sides in the long run is non-cooperative.

Keywords:

• Cooperative Relationship
• Smallholders
• Rural Brokers
• Contract Farming
• Evolutionary Game Model